Land Title in South Australia

When buying property in South Australia, be it purchasing land, a house, investment property or even an apartment, you are purchasing a “title” specific to the parcel of land or property which determines the type of ownership. Essentially, the main difference between the types of “titles” is whether or not the land is “shared” or owned in “common” with other owners. There are two main titles in South Australia, Torrens and community.

Torrens TitleA South Australian invention, Torrens title is a system which records and registers land ownership. Your name is “registered” on the Torrens title register when the Certificate of Title is lodged at the Lands Titles Office. You then become the owner of the property to the exclusion of all others.

This means that you, as the property owner, are responsible for everything within and related to, your property. You are wholly responsible for council rates, services of water, sewerage, storm water and any land tax applicable on the land. This title is particularly relevant to free-standing homes and some townhouses.

Community TitleThis an updated version of the older strata title, meaning that you own your block of land (or apartment) but you share aspects as a “community” i.e. responsibility of common areas is shared with other owners. While strata title is still relevant for existing titles, all new common allotments are now community titled.

A property such as a villa, townhouse or unit is often purchased under community title. When you buy one of these properties, there are ‘common areas’ (driveways, gardens, entryways and so on) used by all of the people living in the development or apartment block. These common areas have to be maintained by all of the unit owners collectively, through a community corporation, because they are shared. The individual owner is responsible for upkeep of the inside of their land and property, but they must share the expense of maintaining common areas.

Your lot entitlement (in simple terms the proportional size of your property compared to the entire property) determines your share you contribute to insurance and other fees charged by the corporation. All community schemes have by-laws that include provision for the administration, management and regulation of the use and enjoyment of the common property. The by-laws are an extremely important aspect of community title new purchasers must be aware of – how much are the fees and what rules exist that you must abide by. For example, many community corporations restrict pets to certain sizes or numbers.

Moiety TitleNow rare and sometimes referred to as a cross lease, moiety ownership of a property comes from being the registered owner of a share of the land the property sits on. The owner then leases the right to occupy their property, along with the right to use common areas, from the other unit owners. It is now common for moiety title to be transferred to either community or Torrens title.

Should you have any questions regarding the title of your land or apartment, or are considering purchasing a property and are unsure of the responsibilities that come with the title, please be in contact at info@salistings.com.au.

Justine

National Property Statistics

Australia’s housing market correction continued through August with the CoreLogic Report National Home Value Index tracking 0.3% lower over the month. Since peaking in September last year, values have been consistently tracking lower, down a cumulative 2.2% through to the end of August 2018.

The good news? Adelaide! As we have continually said, slow and steady wins the race, and while 1.0% annual growth does not seems spectacular, it points to value and affordability in South Australia. This coupled with renewed business confidence in the State is great news for both home owners and those looking to get into the market.

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Source: Corelogic.com.au

As always, please be in contact should you need assistance with any property matter.

If interested in an individual property appraisal or statistics on your suburb or local area, please email info@salistings.com.au.

Justine

1 July Property Legislation Update

Well we are a few weeks into the new financial year and, as is usual, property owners and investors should be aware of various changes to property rules from the ATO.

Australia wide, the greatest and possibly the one with the biggest impact on investors, new home buyers and developers is the requirement for purchasers of new residential premises or potential residential land to withhold an amount of the contract price and pay this directly to the ATO at settlement.

Essentially, this means for affected property transactions, purchasers will need to:

  • split the amount of GST from the total purchase price,
  • pay the GST component directly to the ATO by a disbursement at settlement, and
  • pay the GST exclusive purchase price to the property developer (vendor).

The new rule imposes requirements onto the vendor/developer as well. Developers need to give written notification to the purchasers when they need to withhold.

The actual liability for the GST remains with the property developer, however there are no changes to how property developers lodge their business activity statements.

Should you be contemplating purchasing new residential property or potential residential land there are a number of forms that need to be completed by the purchaser or their representative (a conveyancer or solicitor) after contract signing and prior to settlement. Speak to your agent or conveyancer to ensure you comply with the new requirements or visit https://bit.ly/2tLbVri for more information from the ATO.

1 July 2018 also marks the date from which first home buyers can access super contributions for the purpose of buying their first home. Since 1 July 2017 eligible Australians have been able to make voluntary super contributions of up to $15,000 a year, to a maximum of $30,000 over more than one year, to their superannuation account to help purchase their first home. Since 1 July 2018, eligible Australians are able to apply to their super funds to release these contributions (and earnings) for the purposes of purchasing a first home.

Finally, another change on 1 July 2018: Australians aged 65 years + can make a non-concessional (after-tax) contribution into their super account of up to $300,000 from the sale proceeds of their family home (main residence) if they have owned the property for at least 10 years. Couples will be able to contribute up to $300,000 each, giving a total contribution of up to $600,000.

Again, please visit the ATO website https://bit.ly/2udPt9Jor discuss with your financial advisor for detailed information related to your particular circumstances.

Justine Thomson

 

Selling a Tenanted Property

Selling a rental with tenants requires a number of additional requirements the owner and agent must abide by to ensure tenant rights under Legislation are met. While these requirements initially may seem onerous, by keeping a tenant “in the loop” with timely communication, any issues can be dealt with before they become insurmountable problems. There are pros and cons to selling a tenanted property:

Pros:

  • Rental income continues while the property is on the market.
  • Buyers benefit from purchasing a tenanted property – reducing costs such as letting fees and time vacant after settlement.
  • Potential buyers see the property as “rentable”

Cons:

  • Increased legislative requirements for notice to tenant
  • Reduced flexibility for opens
  • Possible lack of control over the standard of presentation of the property
  • Potential buyer pool – buyers after vacant possession may not be interested

A successful campaign of a tenanted rental keeps the tenant “in the loop” before, during and after the sale. A tenant who does not know what is going on, is uncertain of their future, or is kept in the dark with open times and notice will likely not be accommodating with access to the property for opens.

So, how do you do this?

Notice of Sale

It is a requirement before entering a residential tenancy agreement to advise a prospective tenant if owners have or intend to advertise the property for sale. A tenant can terminate a tenancy if the owner enters into a contract for the sale of the property within 2 months after the start of the tenancy agreement and did not inform the tenant of this intention.

Issue Correct Notices within Required Timeframes

On deciding to sell a tenanted rental property, an owner must advise the tenant with at least 14 days written notice they have entered into a sales agency agreement. Advertising the property or access to the property for the purpose of showing prospective purchasers cannot occur before this 14-day timeframe expires.

Once the initial 14 days has passed, the right of entry to the property for opens is outlined in the Act. These requirements include no more than 2 occasions within any 7-day period, at a time previously arranged with agreement of the tenant. If an agreement cannot be reached, at a time within normal working hours with reasonable notice. Reasonable notice is not defined, but at least 7 days minimum is advised.

Once the property is sold, the tenant must be advised in writing within 14 days or as soon as possible after the contract of sale is entered into of the name of the purchaser and the date from which rent is to be paid to him or her.

Remember, the tenant has a right to stay at the property during any open inspections, including on auction day. The tenant is also entitled to the quiet enjoyment of the property – continuous driving past or prospective purchasers walking around the property may not meet this requirement.

SA Listings tips:

  • Start an open and honest dialogue with the tenant as soon as the decision to sell the property is made.
  • All notices MUST be served in a timely manner, erring on the side of caution.
  • Provide the tenant with a complete schedule of inspections as soon as possible.
  • Any property manager MUST be in the loop with the decision to sell, plus the intended schedule. Consider combining routine inspections with other required access (such as photo sessions) in order to minimise tenant disruption.
  • Consider a small rent reduction throughout the campaign. This will show the tenant you are conscious of the disruption to the tenant’s enjoyment of the property.
  • Stay flexible. The tenant must not unreasonably refuse to allow access. However, be prepared and willing to negotiate access times.

SA listings will happily arrange for all of the above requirements to ensure your sale campaign runs smoothly. We also partner with experienced property managers who understand the needs of both tenants and landlords throughout a sales campaign.

Planning and preparation is needed. But if done, there is no reason the sale of a tenanted property should not go smoothly. Contact us for more information.

Justine Thomson

Exceptional Sale Results without Excessive Commissions

The results are in! SA Listings has selected our last 18 recent sales to statistically prove you get the same results, if not better from a fixed fee Agent compared to a traditional commission based Agent. The results also prove that brand does not matter when selling your home. SA Listings, a relatively new player in the Adelaide real estate market has successfully sold the last 18 properties with an average of 23 days on market, achieving an average of full Vendors asking price and savings in excess of $110,000 in Agent fees to boot!

SA LISTINGS – CLIENT RESULTS AND AGENT FEE SAVINGS
Property Address % of Asking Price Days on Market Agent Fee Saved*
92 Folland Ave Northgate 105.24% 4 $7,312
72 Rapid Ave Lightsview 102.19% 7 $9,400
1/91 Myrtle St Prospect 100.00% 31 $4,590
11 Allen Ave Brooklyn Park 105.00% 11 $7,310
4 Paddington Ave Northgate 108.00% 9 $7,662
109/220 Greenhill Rd Eastwood 98.33% 49 $6,980
140C North East Rd Walkerville 99.11% 34 $6,320
140B North East Rd Walkerville 98.23% 31 $6,210
14 Epsilon Crt Woodcroft 100.00% 16 $3,250
14 Rapid Ave Lightsview 100.00% 52 $1,920
8 Welsh Rd Lightsview 108.70% 5 $7,750
14 Holmeswood Crt Para Hills West 98.00% 46 $3,680
74 Rapid Ave Lightsview 100.00% 1 $7,360
10 Rozells Ave Lightsview 100.00% 7 $7,150
2 Rivergum Cls Walkey Heights 97.00% 20 $6,860
13 Welsh Rd Lightsview 97.22% 21 $9,400
19 Rapid Ave Lightsview 100.00% 26 $6,540
21 Rapid Ave Lightsview 100.00% 43 $5,000

Average Ask Price

Average Days on Market Total Agent Fee Savings
100.95% 23 $114,694
*Savings based on traditional Agent Commission in SA of 2.2% inclusive of GST

The savings in Agent fees is conservative, as it does not take into account significant savings achieved by our clients in marketing fees. Several of the properties listed above had no marketing fees at all as they were successfully matched to purchasers on the SA Listings buyer database. We have in fact, been told by our clients of well known brand name Agents charging additional fees of up to $2,000 for use of pre-market listing techniques, whereby, your property is listed on their website and database for viewing only by their registered subscribers, prior to listing to the general public. This is astounding! One would expect the Agent commission to cover the cost of the Agent actually matching the registered subscribers on their database to your property. Is that not their job? At SA Listings, we database match and contact all relevant parties we believe would be interested in your property. This service is incorporated in the fixed fee package at no additional cost to you, we believe our job as your Agent is to sell the property for the very best price at an affordable cost to youwithout fee gouging!

Also as a consumer be aware, there are some new Agencies providing a low fixed fee but the package does not incorporate a full agent service. Please read the fine print and ask questions of the Agency selling you the packages.

Remember, SA Listings provides a full agent service for an affordable fee with the highest service from listing to settlement, to find out more visit www.salistings.com.au

Justine Thomson

Disruptors in Real Estate

We are hearing the word “disruptors” quite frequently these days, used to describe traditional industries undergoing a shake-up to the way they have always done business. Think transportation with taxis and the advent of Uber, or Amazon’s effect on retail shopping. The combination of technology, forward thinking entrepreneurs and low barrier entries to market have seen consumers benefit from more choice. At SA Listings we have introduced a refreshing business model for the transaction of real estate turning the traditional way of selling real estate on its head.

The SA Listings business model is based on a fee for service, not commission. I worked for many years in Industry Superannuation Funds and believe strongly in the fee for service model over the Retail Superannuation Funds commission model and thought “why doesn’t this apply to real estate?” I had a property to sell and my only choice at the time was to sell it myself or pay a ridiculous commission of 2% or higher, inclusive of GST of the sale price, plus marketing and all other necessary expenses on top. Being time poor, selling it myself was not an option and I had little choice but to pay the generous commission to an Agent. It got me thinking……

Why not save people thousands of dollars and offer an exceptional high-quality service based on a fixed dollar amount?

Is this the Real Estate elephant in the room?

Could the successful Industry Super Fund model of charging a flat administration fee also apply to Real Estate? I went to work and over three years analysed available data about the time it takes to list and market a property, negotiate the sale and close the contract to determine the dollar cost average of selling a property based on a fixed hourly rate. The service and marketing was not to be compromised in delivery of the service and these factors were all added to the equation. My background as a CPA enabled me to crunch the numbers and come up with a new model.

The SA Listings model is based on a choice of low cost, fixed price sale packages inclusive of a full agent service with very high standards, all marketing, all Government searches and Form 1 – everything needed for a Real Estate Agent to successfully obtain the best price for your property. I am often asked where is the incentive to obtain the very best price for us if you are not commission based and my answer is simple: “By achieving the very best price and providing you with exceptional service means you will refer us to your friends and family”. The dollar amount is not the driver to do my job as a professional real estate agent.

As a new kid on the block we are often being criticised by other Agents as “ruining the profession” for charging a fixed fee and even some of our real estate professional associations are critics of the fixed fee model. We take all this criticism with a grain of salt, what we know is our model has strong support from the general public and that is all that matters to us. At SA Listings, what we care about, is providing you with an exceptional service in the sale of your home and getting you the very best price for your home whilst protecting your hip pocket from price gouging. Change is in the air and it is refreshing!

If you have a property to sell in SA and like our way of doing business, we would love to hear from you. Currently we are only operating in the SA market, however, if you have a property to sell interstate or are an Agent who resonates with this way of doing business, we are teaming up with like minded Agents interstate to replicate the model. To find out more about SA Listings, please visit, www.salistings.com.au. Please feel free to drop us a line and tell us what you think, we would love to hear from you.

Justine Thomson

Prescribed Minimum Advertising Price

The Prescribed Minimum Advertising Price or PMAP as known in the real estate industry, relates to legislation in South Australia prescribing the amount an Agent can advertise a property at. The price you and your Agent list in the Sales Agency Agreement will affect the price for which the property can be advertised. This legislation was designed to protect consumers from properties being advertised below current market expectations, a term referred to in the industry as underquoting to bait advertise.

In a Sales Agency Agreement, the Agent will provide a genuine estimate of the likely selling price and this figure is included in “Agents Estimated Selling Price”. The Agents estimated selling price is based on a range of factors including but not limited to, current comparable market sales in your area, the condition of your property, location within the area and any other factors that may impact price. For example, a property positioned on a main road may be appraised lower than the same property in a quiet street in the same area. A good Agent will know the local area well and will provide supporting evidence of how the “Agents Estimated Selling Price” was derived. This is not a guarantee you will receive this price when the property is presented to market, however, it is a genuine estimate based on supporting evidence. In the Sales Agency Agreement, the Agent must express the “Agents Estimated Selling Price” as a single figure without any words or symbols. If you think the estimate is not right, or want comfort in the figure provided you can pay a licensed Valuer to seek an independent valuation of the property.

The “Vendors Acceptable Price” is also included in the Sales Agency Agreement. This is the amount you, the Vendor wants from the sale of your property. When determining this price, you may consider the information provided by the Agent when appraising the property, research sale prices in your area, consider an independent valuation from a licensed Valuer and not allow emotion to cloud your judgment. This figure also needs to be presented as a single figure without any words or symbols.

How does the PMAP all come together? The PMAP is based on the “Agents Estimated Selling Price” and the “Vendors Acceptable Price” listed in the Sales Agency Agreement. The prescribed minimum advertised price is the greater of the “Agents Estimated Selling Price” or the “Vendors Acceptable Price”.

Let’s give an example to help assist in explaining the PMAP. After considering all variables including current market sales in your area, your Agent appraises your property with an “Agents Estimated Selling Price” of $550,000. You have considered the appraisal, researched your area and discussed with your partner and agree your “Vendors Acceptable Price” will be $570,000. The Prescribed Minimum Advertising Price for your property will be $570,000. Your Agent cannot advertise the property at less than this amount.

It is very important you have a good relationship with your Agent, as the advertised price can impact the campaign from the get go. There is no advantage gained by advertising your property above current market conditions. Consumers are well informed these days and will research the area they are looking to buy in with sales information and appraisals at their ready disposal via the world wide web! By advertising your property above market, the likely result is little or no enquiry and a property potentially not selling.

Let’s give another example, to reinforce the PMAP.

“Agents Estimated Selling Price”      $450,000

“Vendors Acceptable Price”               $430,000

The prescribed minimum advertising price is $450,000.

When determining the appraisal of your home you need to have trust and faith in your Agent and understand they have the best understanding of your local area sales and are experts in their field. If you do not trust your Agent’s knowledge there is no point pursuing a Sales Agency Agreement with them. To give an analogy, if you went to your Accountant to do your tax return would you be telling them “this item is tax deductible”, when they are the qualified expert. If you are, then you need a new Accountant!

Justine Thomson